Derivatives Trading Bitcoin on Lightning: A Brief Guide

•

Has the bull started its run? Or is this a bear market rally? If you have an opinion on that, you can gamble with your sats directly from your Lightning wallet without KYC. How to trade #Bitcoin on leverage without centralized exchanges on Lightning? 🧵 👇

1/7 First of all, why should you do this? CEXs are so easy and convenient, you say. Many traders had large amounts of money on FTX, and in November there was also FUD around other exchanges being insolvent.

2/7 Besides this counterparty risk, withdrawal and settlement times on CEXs are slow. Trading directly from a Lightning wallet gives you an edge because you can deposit and withdraw lightning-speed back to your own self-custodial wallet if you wish so.

3/7 No need to have funds laying around on a CEX when you're not in a trading position. Also, no KYC rituals. The funds never leave the Bitcoin ecosystem.

4/7 One derivatives exchange on Lightning is @kollider_trade. It's a peer-to-peer derivatives exchange where users can take positions against each other for longing and shorting Bitcoin. twitter.com/teemupleb/status/1611495600520048640

5/7 Another one is @LNMarkets. LN Markets is not a p2p platform where each user takes one side of the trade, but LN Markets is always a broker taking the other side. LN Markets also enables options trading. twitter.com/teemupleb/status/1637606943840772096

6/7 Both platforms have an option for a synthetic USD in their wallets, if you want to hedge BTC exposure that way. The maximum leverage: ✅ Kollider: 10x ✅ LN Markets: 100x The maximum margin: ✅ LN Markets: 0.1 BTC ✅ Kollider: depends on liquidity

7/7 These platforms are not just for traders. If you're selling goods and services for BTC during a heated market, you can hedge against that BTC by opening a short. Remember proper risk management when trading on these platforms!